Laws hold back SA's economic potential
August 20 2012 at 02:06pm
By Donwald Pressly.
Let's construct a tale. There is a government tender to build a toll road between the new hydraulic fracturing supply hub - Beaufort West - which has turned overnight into the Las Vegas of the Karoo along with Murraysburg.
Industrial activity and economic expansion followed the 2013 greenlight by the government for exploration and then mining of shale gas, which big companies like Royal Dutch Shell, Bundu Oil and Gas Exploration and a few others have discovered is like an underground sea.
The epicentre of the 500 trillion cubic feet gas find, Murraysburg, has become the new Kimberley.
Properties in Beaufort West's tree-lined Bird Street are now commanding prices like those in Camps Bay and Clifton. But Beaufort West is not a patch on Voortrekker Street in Murraysburg, which has simply become the Saville Row of the Karoo. In the two years since the green light and ending of the exploration moratorium, both Beaufort West and Murraysburg have exploded economically.
The Western Cape government believes that by 2017 eight new primary and high schools will need to be constructed to supply the two now sprawling cities. A Karoo Freeway Improvement Project needs to be constructed so trucks supplying sea water to the fracking wells can be sped to the drilling sites, where together with chemicals, it is used to extract the gas from the shale far underground.
Fortnam and Mason, Walmart, Prada and Harrods are planning luxury stores in the two cities. South Africa expects a 6 percent growth rate in 2017 - nearly half of it attributed to the shale gas revolution that has turned the country into a net exporter of energy - and in 2018 growth is expected to tip the elusive 8 percent. The finance minister at the time, Gwede Mantashe, is as pleased as punch with the new revenue streams and almost chocolate-covered increased tax cake.
But then a fight ensues over the new toll road. A construction company, TOO White Engineering and Construction (Pty) Ltd, can't win the road tender from the national government because it gets only 49 points out of a 100 on the broad-based black economic empowerment (BEE) scorecard. The Broad-Based BEE Act and its associated codes of good practice have bogged down many businesses wanting to take advantage of the Karoo nirvana. The road construction is just one example.
The problem was that TOO White appointed James Manyigaffe (Pty) Ltd, a crafty empowered tender procurement company which is known for its gift of the gab, to front for them. James Manyigaffe wins the contract and “the operational delivery” is carried out by TOO White.
But then the Labour Department inspectors and the crack Department of Trade and Industry “white-spotting” unit detect too many people of the wrong colour in the construction fields of the toll road. To cut a long story short, the absurd empowerment law turns TOO White into a criminal company, while James Manyigaffe is quickly cast as a black front.
Western Cape High Court Judge D'Urban Trash sends the executives from both companies to jail for 10 years for the heinous fronting crime, which in any normal society would simply be an ordinary business transaction. The protracted court battle delays the toll road by at least six months. The road construction comes to a halt halfway between Murraysburg - soon to be renamed Mantasheville - and Beaufort West - soon to be Motlanthestad.
It just proves that even in fiction the law is an ass.
